Thursday, January 2, 2014

ACH is bad, but the banks are worse


So there’s been a lot of talk about BitCoin lately, and I particularly liked this piece by Guan - BitCoin’s real value is it's payment system. It doesn't necessarily work very well as a store of value or unit of account, but the very low transaction costs and ease of signup make it attractive as a payments system. The 1% cost of some bit coin transactions is very acceptable for small payments, and its fairly typical for small payments to cost more on a % basis than large ones. That vast majority of bitcoin payments cost far less than 1%, and thats very cheap for an international payments system. 

One of the reason’s that Bitcoin has become popular is because the US payment system sucks - ACH was originally designed in the early 70s, and its way out-dated compared to most of the national payment systems across the globe. Of course most of those systems were built and deployed 20+ years after ACH, but thats kind of the point: the US payments system is outdated and creaking under the demands of today's world. Unfortunately, the big banks that monopolize banking in the US have stymied all efforts at fixing the problem

So I agree with the thrust of Guan's post, but thought it might help to clarify some things - 
  1. ACH is actually a next business day system not unlike what Guan describes in Denmark. If your bank sends an ACH payment to the Federal Reserve by midnight, the Federal Reserve will send it to the receiving bank by 6 am of the next business day. In reality, the cut-off is 2.15 am ET, so really it takes less than 4 hours. However, almost 100% of banks in the US are on batch processing systems left over from the 70s, so each of the steps of making an ACH transfer: 1)debit sender’s account; 2) send to recipient bank via Fed; 3) recipient bank credits recipient account; ends up taking 1 day, and thats what leads to the 2-3 business day time for the end to end ACH payment.
  2. The Federal Reserve charges banks $0.0025 cents per ACH transaction. Thats right, less than 1/3rd of a cent. Think about that the next time your bank tries to charge you $10 for a “Next-day payment”. That’s essentially the bank sending an ACH transaction to the Fed tonight without holding your money for a couple of days first, and charging you for the privilege.
  3. FedWire costs banks $0.138 per transaction. Think about that the next time your bank charges you $35 for a wire transfer.
  4. So if back-end transaction costs are so low, why are retail costs so high? Some markup is to be expected, but these margins are insane, especially given the massive scale of US payments systems. ACH moved $37 trillion in 2012. Because NACHA, the standards body that sets ACH standards, is controlled by the big banks, not by Congress. So essentially, the banks write the rules, and the Federal Reserve implements them. 
  5. Not all customers in the US can get a bank account easily. There are 17 million unbanked adults in the US, and 10s of millions more are "underbanked". One of the main causes is that they ran afoul of a bank some day, and got their name added to debit bureau systems like ChexSystems/Qualifile. Most banks in the country will deny an account for anybody who has a ChexSystem entry.
As even Guan realizes in his post, the payment system is one part of the problem, but the outdated technology being used by banks is another big part. There are over 7000 banks in the US, plus 1000s of credit unions, so fixing the problem of outdated batch processing technology is a herculean task. Forcing banks to adopt new systems, which might allow them to automatically post a FedWire transaction intra-day without teller involvement for example, would bankrupt a lot of the smaller banks. The big banks are even worse off technology wise; CITI has spent billions of dollars to build a new BATCH processing transaction system which they are still rolling out globally; most of the others aren't even trying to fix their systems. Why should they, when they can just pass on the costs to customers, and the regulators aren't allowing any competition?

The Reserve Bank of Australia recently moved to same-day payments in Australia, and all the banks in Australia have a timetable to move to real-time payments within 5 years. The Federal Reserve in the US doesn't even have the authority to think of such a move. So yes, retail payments systems in the US are broadly fucked for consumers. But if you're wondering why, it's because Congress and the regulators have failed consumers in the US.

33 comments:

  1. how ridiculous is it to consider btc as a payment system without considering the commission and time-expense you incur in exhanging from USD or whatever in and out of BTC?

    ReplyDelete
    Replies
    1. This comment has been removed by the author.

      Delete
    2. ********** Welcome to Shop ************

      HI ALL NEW CLIENT
      IM BIG HACKER GOOD
      - I'm is Professional seller,more than 8 years experience,i have sold cvv credit card to many customers all over the world.
      - Selling cvv, fullz many country as: Canada,USA,Australia,UK...all And many country in Europe: Fr,Ger,Spain,Ita...
      - I hope we will work together for a long time.
      - Always sell cvv quality with high balance.

      Contact me:
      - Y!m : wuhacker
      - Mail: wuhacker@yahoo.com

      ___________________ CCV !! CCN ______________________

      List cc and my price..

      - Us (Visa,Master) = 5$ per 1
      - Us (Amex,Dis) = 6$ per 1
      - Us Bin 10$ , US Dob 15$
      - Us fullz info = 25$ per 1
      --------------------------------
      - Uk (Visa,Master) = 10$ per 1
      - Uk (Amex,Dis) = 15$ per 1
      - Uk Bin 15$ , UK Dob 20$
      - Uk fullz info = 30$ per 1
      --------------------------------
      - Ca (Visa,Master) = 15$ per 1
      - Ca (Amex,Dis) = 20$ per 1
      - Ca Bin 15$ , CA Dob 20$
      - Ca fullz info = 30$ per 1
      --------------------------------
      - Au (Visa,Master) = 15$ per 1
      - Au (Amex,Dis) = 20$ per 1
      - Au Bin 17$ , AU Dob 25$
      - Au fullz info = 30$ per 1
      --------------------------------
      - Eu (Visa,Master) = 20$ per 1
      - Eu (Amex,Dis) = 23$ per 1
      - Eu Bin 25$ , AU Dob 30$
      - Eu fullz info = 40$ per 1
      --------------------------------
      - RDP = 20$
      - SMTP = 25$ ( All Country )
      - Italy = 20$ per 1 (fullz info = 35$)
      - Spain = 20$ per 1 (fullz info = 35$)
      - Denmark = 25$ per1 (fullz info = 35$)
      - Sweden = 20$ per 1 (fullz info = 35$)
      - France = 20$ per 1 (fullz info = 35$)
      - Germany = 20$ per 1 (fullz info = 35$)
      - Ireland = 20$ per 1 (fullz info = 35$)
      - Mexico = 15$ per 1 (fullz info = 30$)
      - Asia = 15$ per 1 (fullz info = 30$)


      ________________ Do WU transfer ______________________

      - 700$ for MTCN 8000$
      - 550$ for MTCN 6000$
      - 400$ for MTCN 4000$
      - 200$ for MTCN 1500$

      __________ Bank Logins Prices US UK CA AU EU _____________

      . Bank Us : ( Bank of america,HALIFAX,BOA,CHASE,Wells Fargo...)
      . Balance 3000$ = 150$
      . Balance 5000$ = 250$
      . Balance 8000$ = 400$
      . Balance 12000$ = 600$
      . Balance 15000$ = 800$
      . Balance 20000$ = 1000$

      - Bank UK : ( LLOYDS TSB,BARCLAYS,Standard Chartered,HSBC...)
      . Balance 5000 GBP = 300$
      . Balance 12000 GBP = 600$
      . Balance 16000 GBP = 700$
      . Balance 20000 GBP = 1000$
      . Balance 30000 GBP = 1200$

      __________________ PayPal account _______________________

      = Account PayPal 1500$ = 200$
      = Account PayPal 2500$ = 250$
      = Account PayPal 4000$ = 350$
      = Account PayPal 7000$ = 550$

      _____________ Dumps track 1 track 2 with pin _____________

      - Dumps,Tracks 1&2 Us = 70$ per 1
      - Dumps,Tracks 1&2 UK = 80$ per 1
      - Dumps,Tracks 1&2 Ca = 100$ per 1
      - Dumps,Tracks 1&2 Au = 100$ per 1
      - Dumps,Tracks 1&2 Eu = 110$ per 1

      -Sample Dump + Pin:
      Track1 : B4096663104697113^FORANTO/CHRI STOPHER M^09061012735200521000000 ,
      Track2 : 4096663104697113=0906101273525 21
      Pin : 1783
      ___________________________________________________________

      -WARRANTY time is 10 HOURS. Any cvv purchase over 10 hours can not warranty.
      -If you buy over 30 cvvs, i will sell for you best price.
      -I will discount for you if you are re-seller or you order everyday many on the next day.
      -I will prove to you that I am the best sellers. And make sure you will enjoy doing business with me.
      -I accept PM (Perfect money) ,WU (western union) , BTC (Bitcoins) or Money Gram...

      Contact me
      - Skype: Leads_provider
      - Mail: wuhacker@yahoo.com

      Delete
  2. -- a.t. Expense...USD ..BTC

    BTC to BTC transactions work well, USD to X transactions go through a bad system, this post explains the technical and organization faults ,

    The USD is a token for a poorly designed payment system, therefore you should avoid it when making and accepting payments. This may require you to adjust your saving and spending habits.

    ReplyDelete
  3. I was thinking that the Brazilian payment system was a piece of crap until read this two articles. Here we have a almost instant interbank payment option called TED, between 6 a.m. and 5 p.m., for transactions over BRL 1000, and for less we use the DOC, which pays overnight, both on business days. Those transactions generally costs about BRL 10, but you can have some account types that doesn't even charge for those transactions. In fact, these account types don't even have a monthly fee or subscription payment.

    For transfers to an account in the same bank generally is free and unlimited, also is the usage of the debit card (withdraws have fees after a certain number in a month)

    For business payments, we have the "Boleto", which is issued in one bank and can be paid in any bank, and you don't even need an account to pay, just go to a teller and pay with cash.

    For subscriptions, we have the Automatic Debit system, which a business charge a customer directly on his account, without human intervention. And because a large amount of complains, now banks are implementing the Authorized Direct Debit system, which is automatic, but the account owner can approve/refuse the debit. A Boleto can be registered in this system, so you don't even need the barcode to pay it.


    And checks, that looks like to be widely used in US are practically banned by business here. They were largely used for fraud, and if a business accept a check, it first will cash it out (takes one to five days) and then provide the goods/services.

    I think we Brazilians have a wonderful payment system after all.

    ReplyDelete
  4. Yup - most developed and many developing countries have better payments systems than the US now. Interesting info on Brazil.

    ReplyDelete
  5. I really like your blog. I enjoyed reading your blog and is both educational and interesting.Thanks! Read More

    ReplyDelete
  6. Hello I am jui Islam work as a social media marketing and data entry operator on Fiverr. But i have a problems, my gigs are not on the first page and my sell are not increasing i don't know what is the problems, please take a look of my data entry gig on fiverr and tell me what is the problem!!! I will do 2000 youtube high quality

    ReplyDelete
  7. Most people not bear their banks to order on-line checks as a result of the check prices area unit way too dearly-won. Most of the time the banks merely order the checks for you thru different check printers and price the worth even more.
    check designs

    ReplyDelete
  8. Nice Post! If you’re using your checks for business, don’t worry because there are some people who’ve decided to go for a more formal look by keeping the original design of their checks, except they’ve added a few more helpful information that their clients can use.

    order bank checks

    ReplyDelete
  9. Chexsystems consumer reports can become a serious burden to families and individuals looking to open up a new checking account. Any negative mark, whether minor a major, can prevent a consumer from having a checking or savings account.

    Luckily today, there are many credit unions and banks that are either local or have branches nationwide that are willing to overlook a person's Chexsystems report. A website called "InfoAviator" at http://infoaviator.org/finance/checking-accounts/2014/05/28/how-to-open-a-second-chance-checking/ has a large verified list of these financial institutions offering "Fresh Start" and "Second Chance" checking programs that were specially designed for people that had a poor history of managing checking accounts.

    ReplyDelete
  10. Great blog! Bank check designs come in an unlimited array of styles prints and patterns. now you are able to add your own custom designs to checks or even make your own photo checks with customized check designs.Thanks NFL Football Teams

    ReplyDelete
  11. This was the most common way to order checks. Most people no longer go through their banks to order online checks because the check costs are far too expensive.
    reorder-chicks

    ReplyDelete
  12. Bank check styles are available in a limitless array of designs prints and
    patterns. Currently you’re able to add your own custom styles to checks or perhaps create your own image checks with customized check styles.
    ordering checks online

    ReplyDelete
  13. This is very unique services that exkash is offering in the world ever. I am sure that you will enjoy about to hair that. Now suppose that you have money into your wallet and you want to change into real cash.
    NFL Football

    ReplyDelete
  14. As soon as looking to be able to deal insurance, It truly is confusing In the same way in order to what corporation could be the Easiest to help buy your own insurance from. whether or not That isn't bad enough, anyone additionally be asked to decide whether or not to buy the insurance through a great insurance broker or a good insurance company.insurance news

    ReplyDelete
  15. Thanks for such an interesting article here. I was searching for something like that for quite a long time and at last I have found it here.check ordering is much easier and less expensive. Thanks to online world.Click here

    ReplyDelete
  16. Nice blog...A check verification service provides businesses or individuals with either the ability to check the validity of the actual check or draft being presented, or the ability to verify the history of the account holder, or both.Click here

    ReplyDelete
  17. Hi dear, Are you busy? Stop and visit this for to know “How to make money from Online”. If you want make money from online and if you want extra income and relax just visit here.
    ways to make money

    ReplyDelete
  18. It's really a good and useful piece of information regarding bank cheque.Thank you for sharing.
    NFL Football

    ReplyDelete
  19. I really appreciate your efforts to put this information..Customized checks are the latest trend and most preferred by consumers nowadays.order bank checks

    ReplyDelete
  20. That is the excellent mindset, nonetheless is just not help to make every sence whatsoever preaching about that mather. Virtually any method many thanks in addition to i had endeavor to promote your own article in to delicius nevertheless it is apparently a dilemma using your information sites can you please recheck the idea. thanks once more.
    BitBitcoin Australiacoin Australia

    ReplyDelete

  21. wow! Thanks for this great information. I have also seen another good article about making quickly integrated payments and tracking them too. Check out this one Visit now https://www.workspoke.com/

    ReplyDelete
  22. I’m student of BBA and studied banking & finance as subject, now I’m thinking about to choose it as specialized subjects. My personal interest is in banking, which is allowing me to go through it. Thanks for sharing such an informative post. Keep it up.

    ReplyDelete
  23. Hello All
    I'm offering following hacking services
    ..hacking Tools
    ..Spamming Tools
    ..Scam pages
    ..spam tools scanners make your own tools
    ..Keyloggers+fud+xploits

    Other hacking svs
    ..Western union Trf
    ..wire bank trf
    ..credit / debit cards
    ..Perfect Money / Bintcoing adders
    ..email hacking /tracing
    ..Mobile hacking / mobile spam

    Fake peoples have just words to scam peoples
    they just cover their self that they are hacker
    but when you ask them a questions they don't have answer
    they don't have even knowledge what is hacking
    am dealing with real peoples who interested and honest
    also teaching hacking subjects in reasonable price
    with private tools and proof.

    Availability 24/7 contact only given below addresses
    salvrosti@gmail.com
    salvrosti@yahoo.com
    Icq: 718684828
    Skype: live:Salvrosti

    ReplyDelete
  24. This comment has been removed by the author.

    ReplyDelete
  25. This is a truly good site post. Not too many people would actually, the way you just did. I am really impressed that there is so much information about this subject that have been uncovered and you’ve done your best, with so much class. If wanted to know more about green smoke reviews, than by all means come in and check our stuff. crowdfunding cryptocurrency

    ReplyDelete
  26. Cyberprofessionalhacker is the real hacker out there, please be careful of imposters.
    they are somany hackers who claim to be what they are not.
    i have been ripped off twice by this so called hackers. please be careful
    if you need an hacker mail (cyberprofessionalhacker@gmail.com), they work effectively,
    i can testify to that. mail them today and you will get your work done (+1) 973-547-9527

    ReplyDelete
  27. This comment has been removed by the author.

    ReplyDelete
  28. Hello All
    I'm offering following hacking services

    ..Western union Trf
    ..wire bank trf
    ..credit / debit cards
    ..Perfect Money / Bintcoing adders
    ..email hacking /tracing
    ..Mobile hacking / mobile spam

    ..hacking Tools
    ..Spamming Tools
    ..Scam pages
    ..spam tools scanners make your own tools
    ..Keyloggers+fud+xploits


    Fake peoples have just words to scam peoples
    they just cover their self that they are hacker
    but when you ask them a questions they don't have answer
    they don't have even knowledge what is hacking
    am dealing with real peoples who interested and honest
    also teaching hacking subjects in reasonable price
    with private tools and proof.

    Availability 24/7 contact only given below addresses
    salvrosti@gmail.com
    Icq: 718684828
    Skype: live:Salvrosti@gmail.com

    ReplyDelete
  29. ********** Welcome to Shop ************

    HI ALL NEW CLIENT
    IM BIG HACKER GOOD
    - I'm is Professional seller,more than 8 years experience,i have sold cvv credit card to many customers all over the world.
    - Selling cvv, fullz many country as: Canada,USA,Australia,UK...all And many country in Europe: Fr,Ger,Spain,Ita...
    - I hope we will work together for a long time.
    - Always sell cvv quality with high balance.

    Contact me:
    - Y!m : wuhacker
    - Mail: wuhacker@yahoo.com

    ___________________ CCV !! CCN ______________________

    List cc and my price..

    - Us (Visa,Master) = 5$ per 1
    - Us (Amex,Dis) = 6$ per 1
    - Us Bin 10$ , US Dob 15$
    - Us fullz info = 25$ per 1
    --------------------------------
    - Uk (Visa,Master) = 10$ per 1
    - Uk (Amex,Dis) = 15$ per 1
    - Uk Bin 15$ , UK Dob 20$
    - Uk fullz info = 30$ per 1
    --------------------------------
    - Ca (Visa,Master) = 15$ per 1
    - Ca (Amex,Dis) = 20$ per 1
    - Ca Bin 15$ , CA Dob 20$
    - Ca fullz info = 30$ per 1
    --------------------------------
    - Au (Visa,Master) = 15$ per 1
    - Au (Amex,Dis) = 20$ per 1
    - Au Bin 17$ , AU Dob 25$
    - Au fullz info = 30$ per 1
    --------------------------------
    - Eu (Visa,Master) = 20$ per 1
    - Eu (Amex,Dis) = 23$ per 1
    - Eu Bin 25$ , AU Dob 30$
    - Eu fullz info = 40$ per 1
    --------------------------------
    - RDP = 20$
    - SMTP = 25$ ( All Country )
    - Italy = 20$ per 1 (fullz info = 35$)
    - Spain = 20$ per 1 (fullz info = 35$)
    - Denmark = 25$ per1 (fullz info = 35$)
    - Sweden = 20$ per 1 (fullz info = 35$)
    - France = 20$ per 1 (fullz info = 35$)
    - Germany = 20$ per 1 (fullz info = 35$)
    - Ireland = 20$ per 1 (fullz info = 35$)
    - Mexico = 15$ per 1 (fullz info = 30$)
    - Asia = 15$ per 1 (fullz info = 30$)


    ________________ Do WU transfer ______________________

    - 700$ for MTCN 8000$
    - 550$ for MTCN 6000$
    - 400$ for MTCN 4000$
    - 200$ for MTCN 1500$

    __________ Bank Logins Prices US UK CA AU EU _____________

    . Bank Us : ( Bank of america,HALIFAX,BOA,CHASE,Wells Fargo...)
    . Balance 3000$ = 150$
    . Balance 5000$ = 250$
    . Balance 8000$ = 400$
    . Balance 12000$ = 600$
    . Balance 15000$ = 800$
    . Balance 20000$ = 1000$

    - Bank UK : ( LLOYDS TSB,BARCLAYS,Standard Chartered,HSBC...)
    . Balance 5000 GBP = 300$
    . Balance 12000 GBP = 600$
    . Balance 16000 GBP = 700$
    . Balance 20000 GBP = 1000$
    . Balance 30000 GBP = 1200$

    __________________ PayPal account _______________________

    = Account PayPal 1500$ = 200$
    = Account PayPal 2500$ = 250$
    = Account PayPal 4000$ = 350$
    = Account PayPal 7000$ = 550$

    _____________ Dumps track 1 track 2 with pin _____________

    - Dumps,Tracks 1&2 Us = 70$ per 1
    - Dumps,Tracks 1&2 UK = 80$ per 1
    - Dumps,Tracks 1&2 Ca = 100$ per 1
    - Dumps,Tracks 1&2 Au = 100$ per 1
    - Dumps,Tracks 1&2 Eu = 110$ per 1

    -Sample Dump + Pin:
    Track1 : B4096663104697113^FORANTO/CHRI STOPHER M^09061012735200521000000 ,
    Track2 : 4096663104697113=0906101273525 21
    Pin : 1783
    ___________________________________________________________

    -WARRANTY time is 10 HOURS. Any cvv purchase over 10 hours can not warranty.
    -If you buy over 30 cvvs, i will sell for you best price.
    -I will discount for you if you are re-seller or you order everyday many on the next day.
    -I will prove to you that I am the best sellers. And make sure you will enjoy doing business with me.
    -I accept PM (Perfect money) ,WU (western union) , BTC (Bitcoins) or Money Gram...

    Contact me
    - Skype: Leads_provider
    - Mail: wuhacker@yahoo.com

    ReplyDelete